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The European Union (EU) is a unique and relatively new market for U.S. beef. In addition to the EU’s longstanding restrictions on beef from hormone-treated cattle, high tariffs also made this market very difficult to penetrate until establishment of the EU’s duty-free high-quality beef quota in August 2009.

For the past three years, the quota has allowed 20,000 metric tons (mt)/year of high-quality beef at an in-quota tariff of zero. For the upcoming quota year (which began Aug. 1), the quota has been expanded significantly â€’ to nearly 46,000 mt. Exports under the duty-free quota are not exclusive to the U.S. but must meet this product definition:

Beef from cattle less than 30 months of age,

On feed for at least 100 days with minimum energy and intake requirements, and

Carcasses must be quality graded.

In addition to beef from the U.S., Europe has opened the quota to imports from Australia, Canada, New Zealand and Uruguay.

More U.S. beef suppliers would likely take advantage of the duty-free quota if an agreement can be reached with the EU on the use of antimicrobial washes for the purpose of reducing pathogens. Discussions continue between U.S. and EU trade officials on this key issue, but no timeline is yet in place for any change in the EU’s strict policies regarding pathogen-reduction technologies.

Through the first five months of 2012, USDA data for U.S. beef exports to the EU indicate volume (9,814 mt) is down 16% compared to last year, while export value is 2% lower at $86.8 million. However, EU import data are generally considered a more accurate measurement of U.S. beef trade activity in this market. According to these import data, the EU’s total 2012 beef imports from all suppliers are down 10% in volume (94,075 mt) and 8% in value ($904.76 million) compared to last year’s pace. While import volume is lower from all three of Europe’s top beef suppliers (Brazil, Argentina and Uruguay), imports from the U.S. are actually up 2% to 6,275 mt.

Total EU chilled beef imports are down 10% compared to last year at 38,243 mt. With imports from the U.S. being almost entirely composed of chilled beef (6,192 mt, up 2%), the U.S. is now the EU’s second-largest supplier of chilled beef with 16% market share. Imports from the EU’s top chilled beef supplier, Argentina, have fallen 18% this year, while imports from No. 3 supplier Brazil are up 6%. Imports from Uruguay and Australia are down 10% and 2.5%, respectively.

According to John Brook, U.S. Meat Export Federation (USMEF) regional director for Europe, Russia and the Middle East, demand for U.S. beef remained very resilient through the first half of 2012 despite the weakened euro and increasingly high purchase prices. He cautions, however, that economic conditions are making the business climate more difficult.

“With the price of imported beef from South America easing, the price difference between U.S. beef and that of other origins has widened considerably in recent weeks,” Brook explains. “The short-term outlook for U.S. beef remains positive, as importers’ commitments for the summer months are for volumes slightly below recent levels.

“But the concern is for October 2012 and beyond, especially if the euro fails to appreciate against the U.S. dollar. Importers are being cautious in their planning for the fourth quarter and some have expressed serious concerns about their ability to maintain the current level of business into 2013,” Brook says.

Discuss this Article 2

Eaglepass (not verified)

on Aug 4, 2012

My wife and I along with a nephew started our cow calf operation in Middle Tennessee in 2004 with the purchase of 24 pregnant brood cows. At present we are up to 93 head of brood stock (commercial Angus). We are both graduates of the U of Tennessee Master Beef Producers Program and BQA Certified. Like some, my wife and I have traveled all over the world. Without exception we always sample the local beef in whatever country we are in. I am presently half way through a three year contract in Saudi Arabia prior to final retirement in 2014. Living in Saudi Arabia we enjoy food from all over the world and beef is no exception. Beef from Brazil, New Zealand, Ireland and Veal from Holland as well as local beef, veal and camel meat is readily available. At the top of the beef list is naturally US Beef.
I have provided the preceding narrative to set the stage if you will for the following observations. With only limited exception US Beef is the most expensive beef in the world. In the last 18 months we have eaten beef in England, France, Germany, Sweden, Saudi Arabia and the United Arab Emirates. At most of the higher end hotels the only beef sold or at least advertised in Certified Angus Beef or Certified US Prime or Choice Beef. Without exception the US Beef lives up to its reputation and is the most consistent, in flavor, texture and overall quality. In standing at a meat counter in one of the better grocery stores in Riyadh recently I was waiting my turn and just to get his reaction, I happened to mention to a fellow next to me that the US beef is certainly expensive (top choice Rib Eye at about $19.00 lb.) as compared to the rest of the options. He was European (British I think) and did not hesitate in his praise of American Beef and said that as far as he was concerned if he was going to eat a steak it was going to come from America, he didnâ€™t care about the cost and if he could not get American steaks he would go without.
I pass on this observation as a fellow beef producer and American Cattleman. I am looking forward to my retirement and the raising of calves for the beef production markets. I also look forward to more travel and the enjoyment of letting people all over the world know that I am part of one of the most reputable industries in America. I never pass up an opportunity to educate people about the US beef industry and the differences between American and beef from other countries. We are doing a good job.
Mike & Linda Luna Wagers
Culleoka, Teennessee

This article glosses over the recent WTO settlement which traded no tariff on "hormone" free beef in exchange for the USA dropping the rolling tarriff penalty authorized by the courts for the EU's bad behavior. EU beef imports remain hormone free. This is outrageous since artificial insemination including MGA synchonization protocols are widely used in Europe.